Women and high cost credit: A gender analysis of the home credit industryin the UK

In the UK, home credit (also known as doorstep lending) is a long-established industry whose core business is offering small, short-term, unsecured cash loans using a network of agents. While undoubtedly in decline, this traditional model of lending has nonetheless persisted at a time when consumer credit and other financial services are increasingly marketed and delivered online. The home credit industry has typically operated under a female-to-female lending model. Women account for 65% of the industry's customers (Collard et al., 2013) and women are also more inclined to work for the industry as loan agents. In this market a highly female-oriented demand meets with a highly feminized agency workforce. Thus, in many respects, the industry is part of a women's economy involving highly gendered social networks (Rowlingson & Kempson, 1994, p. 4). Although women's strong connection to doorstep lending (as both borrowers and loan agents) has been acknowledged in academic and policy circles, little is known about whether the policy and regulation governing home credit takes into account its female-oriented nature, and thus protects the rights and interests of women, who are its main users. To contribute to filling this gap, this paper addresses two main questions: (1) To what extent is gender integrated into the regulations and policies governing the UK home credit industry? (2) To what extent are international principles to promote women's financial empowerment, as set out in the G20-led women's financial inclusion agenda, evident in UK financial services and home credit in particular? The paper is based on a comprehensive review of existing research, industry reports and policy documents. The findings of this study underline that although the regulator and other stakeholders of the UK financial services industry have taken initial steps to integrate gender into the regulatory and policy framework in which the home credit industry operates, there is still some work to be done. More specifically, policy interventions in the home credit market and the assessment of their impact have been generally developed, implemented and monitored in a gender-neutral fashion. This may explain the apparent mismatch between policy and the urgent need to protect and empower women as financial customers. A much bigger question, which is beyond the scope of this paper, is how to effectively tackle the structural inequalities that mean women on lower incomes are the main users of home credit and other high-cost forms of borrowing. The remainder of this paper is structured as follows. Section 2 briefly sets the industry scene for home credit and sets out the key features of the home credit model. Section 3 moves on to examine the gendered nature of home credit, through a demand-side analysis of home credit users and a supply-side review of home credit loan agents. Section 4 presents a gender-based analysis of the policy and regulatory framework governing the home credit industry. Finally, Section 5 sets out conclusions and recommendations from this research.